Is my agent's CMA actually undervaluing my home, or am I overestimating it?

Your concerns are reasonable, but the age or size of a comparable does not automatically make it unusable. The question is whether it is the best available evidence and whether the meaningful differences were properly considered. Ask the agent to show you a side-by-side grid for each comparable, including sale date, living area, lot size, condition, upgrades, location and any material features your property has that the comparable does not. You should also see current competing listings and, where information is available, pending sales. Closed sales show what buyers paid; active listings show what your home will compete against today. Improvements do not always return their full cost, and a larger lot only adds substantial value when buyers in that market are paying for the additional land. Still, the agent should be able to explain the reasoning instead of simply presenting a number. I would obtain one or two additional CMAs from experienced local listing agents. Compare their evidence and pricing strategy, not merely which agent recommends the highest price. For optional additional information: https://pillarrealestate.com/blog/what-is-a-comparative-market-analysis-cma Amber Johnson, Founder Pillar Real Estate 805.835.3425 [email protected] 1345 Park St. Paso Robles, CA 93446 DRE# 01925434

Nadia, your instinct to push back is right, but the fix is not a different number. It is asking her to show you the adjustments. Here is the part that will probably surprise you. Comparable sales that are seven to thirteen months old are not automatically a red flag. The appraisal standard lenders work to says comps should generally have closed within the last twelve months, and it specifically says the most recent sale is not always the best one. A nine-month-old sale that needs one supported time adjustment is considered better evidence than a one-month-old sale that needs five different adjustments. So the age of her comps is not by itself the problem. What would be a problem is using older comps with no market conditions adjustment, and using smaller homes on half the lot without adjusting for either. So ask her for three things, in writing: - The dollar adjustment she applied for lot size, and how she derived it. The defensible method is paired sales analysis, which means finding two otherwise similar sales that differ mainly in lot size and letting the price difference tell you what the market pays for land here. - The market conditions adjustment applied to each older comp, stated as a percent per month, and what supports that percentage. - The comparables she looked at and rejected, and why. If she can produce those, you have a real CMA and the number is probably closer to right than you want it to be. If she cannot produce any of it, you have learned something about the agent rather than about your house. Now the concept that actually answers your question, and it is the one to say out loud to her: bracketing. Good comparable selection brackets the subject. Some comps should be superior to your home and some inferior, so the value is boxed in from both sides. You are describing a set where every single comp is smaller and on roughly half the lot, and her conclusion sits at the low end of that inferior set. That is unsupported on its face, because nothing in her data establishes a ceiling. Ask her directly: what is the superior comp that brackets my property on the high side. That is a fair, specific, professional question, and it is much harder to wave off than "I think it is worth more." One caution, offered as someone who has this conversation with sellers most weeks. Improvements almost never return dollar for dollar. Appraisers and good agents adjust for contributory value, which is what the market will pay for the improvement, not what you spent on it. A $90,000 kitchen might contribute $45,000. When a seller and an agent are far apart on price, the improvements line is where the gap usually lives, and more often than not the agent is closer to right. That does not mean she is right here. It means go in wanting the evidence rather than wanting to win. If you are still uneasy after that conversation, pay for an independent pre-listing appraisal. In most markets it runs a few hundred to about eight hundred dollars, it is done by someone with no stake in the listing, and it gives you a supported document to hand the buyer's appraiser later if the deal ever gets tight. On a house you are unsure about, that is cheap insurance. My name is Zoltan Peresztegi and I work the South Bay and Palos Verdes Peninsula in Los Angeles County, where large lots and heavily improved homes make this exact adjustment argument the whole ballgame. I am not licensed in Delaware, but if you want an introduction to a strong Wilmington agent for a second opinion, I am glad to make one. Zoltan

Yes, lot size and condition should be considered, but neither automatically translates dollar-for-dollar into a higher value. The bigger concern to me would be whether those 7 - 13 month-old, smaller sales are truly the best comparable properties available. A good CMA isn't just a list of recently sold homes. I want to know why each comparable was chosen, what differences matter to buyers in that particular market, and what the current competition looks like. I also look at pending sales when that information is available because they can help show where the market is moving, not just where it has been. Improvements matter, but sellers also have to be careful not to assume that the amount spent on an improvement equals the amount it adds to market value. The same is true with a larger lot. Its value depends on the property and the market. I would ask the agent to walk you through the adjustments and explain why she believes those are the best comparable sales. If the explanation doesn't make sense, getting a second pricing opinion before listing is completely reasonable.

Nadia, your concerns are reasonable. A good CMA should consider square footage, lot size, condition, improvements, location and how recently the comparable homes sold. Older or smaller homes can still be useful comps, but the agent should explain and adjust for significant differences. I would ask the agent to show you exactly how those differences were accounted for and consider getting a second CMA from another experienced local agent before deciding on a listing price.

Nadia, ask for a CMA with recent comparables, ideally within the last 3 months and no older than 6 months. Keith Jean-Pierre Managing Principal The Dapper Agents Real Estate Operations in ALL 50 States